Distance dimensions and their impact on business

PRACE NAUKOWE UNIWERSYTETU EKONOMICZNEGO WE WROCŁAWIU RESEARCH PAPERS OF WROCŁAW UNIVERSITY OF ECONOMICS 2019, vol. 63, nr 7

ISSN 1899-3192e-ISSN 2392-0041

Katarzyna Czernek-MarszałekUniversity of Economics in Katowice e-mail: [email protected] ORCID: 0000-0002-9889-9821

DISTANCE DIMENSIONS AND THEIR IMPACT ON BUSINESS COOPERATION IN A TOURIST DESTINATION*WYMIARY DYSTANSU I ICH WPŁYW NA WSPÓŁPRACĘ GOSPODARCZĄ W DESTYNACJI TURYSTYCZNEJDOI: 10.15611/pn.2019.7.17JEL Classification: D91, M21, Z30, Z31

Summary: Interorganizational cooperation depends on many factors including the similarity and differences between the partners in terms of e.g. organizational culture, knowledge, resources, or in relation to geographical location to each other. These differences can be analyzed by using the concept of distance which occurs in various dimensions. The aim of the paper is to identify distance dimensions and to indicate how they affect business cooperation in a tourist destination. To achieve this aim, the research on economic cooperation was used, involving semi-structured interviewees with tourist entrepreneurs operating in different Polish municipalities. Research showed that all types of distance dimensions (cognitive, communicative, organizational, functional, social, cultural and geographical) are important for tourism cooperation, although in relation to the processes related to a given territory (e.g. tourism development) the role of some of them, such as social distance or geographical, is crucial.

Keywords: distance, proximity, distance dimension, cooperation, tourist region.

Streszczenie: Współpraca międzyorganizacyjna zależy od wielu czynników, w tym od podobieństwa i różnic między parterami w zakresie np. kultury organizacyjnej, posiadanej wiedzy, zasobów czy też lokalizacji geograficznej względem siebie. Różnice te można analizować, wykorzystując koncepcję dystansu, który może występować w różnych wymiarach. Celem artykułu jest identyfikacja wymiarów dystansu i wskazanie, jak oddziałują one na współpracę gospodarczą w regionie turystycznym. Aby osiągnąć ten cel, wykorzystano badania nad współpracą w postaci wywiadów półstrukturyzowanych z przedsiębiorcami turystycznymi działającymi w różnych polskich gmianch. Badania pokazały, że wszystkie

* The project was financed from resources of the National Science Centre in Poland according to decision UMO-2017/27/B/HS4/01051 (Relacje społeczne jako stymulanta innowacyjności organiza-cyjnej – kontekst współpracy międzyorganizacyjnej w wybranych sektorach kreatywnych).

218 Katarzyna Czernek-Marszałek

rodzaje wymiarów dystansu (poznawczy, komunikacyjny, organizacyjny, funkcjonalny, społeczny, kulturowy oraz geograficzny) są ważne dla współpracy w turystyce, choć w odniesieniu do procesów związanych z danym terytorium (np. rozwojem turystyki) rola niektórych z nich, takich jak dystans społeczny czy geograficzny, jest kluczowa.

Słowa kluczowe: dystans, bliskość, wymiar dystansu, współpraca, region turystyczny.

1. Introduction

In recent years the issue of economic cooperation as an activity leading to competitive advantage of both enterprises and areas (e.g. tourist destinations) is being very often analyzed in literature [Garrod, Fyall 2017; Gursoy et al. (eds.) 2015]. It is emphasized, among other things, that economic cooperation requires innovative activities, leading to the effective exchange of knowledge and communication between partners. Thanks to this, a synergy effect appears that would not be possible by acting alone [Maciąg 2016]. Such cooperation is also particularly important in the tourism sector, if only due to the fact that no entity is able to fully meet all the needs of tourists – e.g. accommodation, gastronomy, visiting various types of attractions, transport, etc. A complex and internally diverse destination tourist product is therefore created by many entities, and the coordination of activities between them, as well as the cooperation between these entities, determines the level of tourists’ satisfaction with the regional tourist product [Rapacz, Gryszel 2010].

It should be emphasized, however, that although such business cooperation is important, it is difficult, because partners often represent a different type of organization, often with a different organizational culture, operating conditions or have different professional experience. These differences can therefore hinder cooperation as they may lead to problems in communication and knowledge exchange. On the other hand, too close relations and too much similarity of business partners and the conditions in which they operate may cause their lack of openness to new solutions, which leads to the so-called “collective blindness”. It is mainly from partners with different experience, perception and knowledge that one can learn the most, and thus generate innovative solutions [Arribas et al. 2013]. Analyzing the differences and similarities between partners is possible using two literature concepts, i.e. distance and proximity and their dimensions [Boschma 2005; Gertler 1995].

The aim of this paper is to identify distance dimensions and to indicate how they affect business cooperation in the tourist destination. To achieve this aim, research on economic cooperation conducted by the author as part of several research projects in 2008-2016 among entrepreneurs operating in the tourism sector was used. All projects used qualitative research and semi-structured interviews (in total 130) conducted with tourist entrepreneurs in order to identify the factors determining their business cooperation – both bilateral and multilateral. The data was collected in different parts of Poland, especially among entrepreneurs running their businesses in the south of the country.

Distance dimensions and their impact on business cooperation in a tourist destination 219

2. The proximity and distance concepts

To analyze the similarities and differences between entities (including partners in cooperation) the literature uses the concept of proximity and distance [Parjanen et al. 2011]. Usually the former is used to analyze the conditions of knowledge exchange and transfer [Gertler 1995], and thus economic cooperation.

Proximity is understood as the similarity (of features, properties, attributes of the organization) [Boschma 2005; Klimas 2013, p. 193] or embeddedness in similar organizational, resource (knowledge), institutional, geographical or social conditions. The so-called “hypothesis of proximity” assumes that the closer the organizations are (the higher level of proximity between them), the more likely they are to cooperate effectively [Klimas, Twaróg 2013]. Proximity understood in this way goes beyond its only physical dimension – next to geographical proximity there exist also: cognitive, organizational, institutional and social proximity [Boschma 2005]. These different proximity dimensions reduce uncertainty, facilitate coordination, mutual learning and knowledge sharing.

On the other hand, it is emphasized that too much proximity may also have a negative impact on cooperation [Boschma 2005], as it limits the flexibility and innovativeness of partners, so a certain level of distance between them is needed. This allows the use the concept of distance, which also occurs in various dimensions.

2.1. Distance dimensions

Harmaakorpi, Tura and Artima [2006] mention seven dimensions of distance between entities: • cognitive, • communicative, • organizational, • functional, • cultural, • social, • geographical.

Cognitive distance is the difference in the way of thinking and knowledge bases. It may occur for several reasons. There may be differences in the scope of knowledge between entities – they may have a different knowledge on various topics, and also they may have a similar knowledge but on a different level. A large cognitive distance causes problems in communication between partners, while a small distance limits the innovativeness of partners’ activities.

Communicative distance means differences in concepts, ways of communication (including professional languages) used by partners. This distance arises when partners use terms that are incomprehensible to others or those that are differently understood in other areas of expertise. When partners use the same language it is


easier for them to communicate effectively. On the other hand to make decisions and actions of partners innovative, it would be worth having some differences in communication, even in a complementary way of understanding certain issues. The “optimal level” of communicative distance can also be achieved by inviting a “third party” into a relationship in order to interpret knowledge for both parties.

Organizational distance comes from differences in ways of coordination transactions and the information shared by entities. Each partner has its own autonomy and level to which it accepts interference from other entities. When the level of this interference resulting from the need to coordinate activities is too great, it results in the creation of hierarchical organizations and strict control, which blocks innovativeness of cooperation and may negatively affect partners’ satisfaction of cooperation. On the other hand, when the level of organizational coordination is too low, it favors uncertainty and opportunist activities.

The source of a functional distance are differences in the knowledge among entities representing various fields, e.g. sectors, branches, industries or clusters. Knowledge in such a situation is interpreted in different contexts and based on different experience. It is often specialist knowledge, characteristic for a given group of entities, e.g. industry. The greater the distance, the greater the communication problems, and the smaller the distance, the easier the communication of entities is, but the possibilities of learning from each other are lower, and thus the likelihood of innovative actions is lower too. The concept of functional distance is similar to cognitive distance, but the latter is broader and refers to the extent to which partners can communicate efficiently, whereas functional distance refers to the extent to which they can learn from each other, what they exchange and the potential value of these exchanges (see: [Knoben, Oerlemans 2006]).

Regarding social distance, according to the concept of social embeddedness by Granovetter [1985], economic relations are embedded in a social context, hence social ties affect business relations, and business, the social ones. Thus, both groups of relationships are mixed together. When partners share trust and closeness based, for example, on friendships, acquaintances, family relationships, etc., one talks about strong ties. Such strong ties facilitate communication in cooperation and, for example, the exchange of tacit knowledge, because of the existing trust between the partners. On the other hand, when the level of this trust is too high and the ties are too strong, it may result in opportunist activities, lack of innovativeness, closing off from external (unknown) entities and new solutions or conflicts between the partners.

Cultural distance refers to differences in the organizational culture of the entities represented by the partners. When organizational cultures are similar, communication can be easier, as well as efficiency in operations, which results from similar values, standards or procedures used by partners in their own organizations. When there are large differences in the organizational culture, communication can be more difficult, but on the other hand – more interesting. This distance is difficult to reduce, because the change of norms, and in particular the values of the partners is a long and difficult process.


Geographical distance means the geographical distance related to the objective spatial or physical distance between economic entities [Boschma 2005], but also to how the distance is perceived by the partners (i.e. their subjective assessment of whether it is large or not). To a significant extent this depends on technological possibilities and infrastructural and transport solutions [Rallet, Torre 2005]. Short distances facilitate direct interactions, e.g. the exchange of knowledge or communication in general, and therefore promote cooperation [Boschma 2005; Knoben, Oerlemans 2006]. However, too much geographic proximity may favor the frequency of meetings leading to personal conflicts, as well as being closed to entities located far away in the geographical space. This limits innovativeness. On the other hand, if the geographical distance is too large it can hinder the communication of partners, because personal contact can often achieve much more than contact via the media.

3. Methodology

The paper presents the results of empirical research conducted on economic cooperation in tourism in 2008-2016 as part of three research projects. In total there were 130 in-depth, semi-structured interviews conducted with entities representing the public, private and non-profit sectors, taking activities related to tourism. These entities included local authorities as well as representatives of associations working for the development of tourism in a given area, entrepreneurs providing services like transport, food, accommodation, tourist attractions and tourist intermediation. Each of the research projects was aimed at the identification and analysis of tourist cooperation determinants. A brief description of all the projects is presented in Table 1.

Table 1. Characteristics of research projects used to analyze distance dimensions and their impact on economic cooperation

Time Aim of the research Place Number of interviews

Type of interviewees

2008-2010 Identification of determinants of cooperation in a tourist region

Municipalities: Szczyrk, Wisła, Ustroń, Brenna, Istebna

66 Public, private, non-profit sector

2013-2014 The evaluation of the role of social networks (social proximity/distance) in dyads and networks

Wisła 48 Public, private sector

2016 Identification and comparison of determinants of dyadic and network tourism cooperation

16 Polish destinations – each located in one of the 16 voivodeships in Poland

16 Private and public sector

Source: own elaboration based on empirical research.


The interviewees were asked about factors determining their cooperation – both bilateral (in the form of dyads, i.e. with a specific partner indicated by them) and multilateral (in a network – three or more entities, e.g. in the WOT – Wisła Tourism Organization). These determinants were of a diverse nature – economic, cultural, social, political and others – and corresponded to various dimensions of the distance being considered in this paper. Interviews of each of the three projects were recorded and then transcribed. The material was then coded using deductive codes corresponding to seven types of distance dimensions and inductive codes emerging from the empirical material. Quotations from interviews were used to present the findings, as they allow to validate the conclusions drawn and give the reader a sense of personal contact with the interviewees and a better understanding of the issues taken up.

4. Findings

4.1. Cognitive distance

The research showed that large cognitive distance caused problems in communication between partners. This is confirmed by the words of the secretary of the Wisła Tourist Organization, who talked about the big differences in the approach to tourism development in Wisła between WOT itself and some entrepreneurs. Different ways of thinking and views on the possibilities of tourism development in the city often resulted in such a large cognitive distance that entrepreneurs did not decide to join the WOT:

“The owner of Villa (name) also wanted to enter (WOT), there was a gentleman who developed the program, the program was nice, but to enter it we would have to made him a mayor. This is also an interesting man. This (name of the villa) is in Łabajów (Wisła district), but this gentleman lived half a year in Poland, half a year in Japan, this is a person who was living abroad for a long time and has a different perception and the Polish reality is completely different...” [P39]1.

The interviews showed that the cognitive distance, if it is not too big, so that the partners can absorb the knowledge of the other party and enrich their own knowledge, is needed and favors innovative ideas and allows to gain new experiences:

“Well, you know, if someone would like to cooperate and had a similar infrastructure and a similar idea, then it makes no sense” [P3].

“Each such integration meeting is an opportunity to, firstly, get to know each other better or (when) people know each other – one will think of one thing, the other will think of something else, add a few words from themselves, some of their experiences and it’s just the best ... If everyone is at home, then they have come up with something, right? And maybe it turns out, for example, that someone has already passed it. So he will say: and I did something like that and it turned out like this, so maybe I would change (this and this) and then there is a discussion” [P4].

1 The number means the interviewee code.


4.2. Communicative distance

The research showed that a large communication distance, resulting, among others, from the use of a different language (which is also associated with the fact that some entities functioned in completely different conditions) hinders cooperation or discourages it. This is confirmed by the words of the interviewees referring to cooperation in the form of partnership structures such as the Beskid or the Wisła Tourism Organization (BOT or WOT). Both organizations brought together many, often quite diverse (in terms of type of activity, size of the enterprise, etc.) entities. Frequently they could not find a “common language”, which meant that they sometimes resigned from membership in the organization or pointed to this factor as a problem that the organization must deal with:

“Small and large entities do not find a common language (...). Large entities don’t treat small ones as partners, while small ones think that large ones will eat them” [P18]. “Researcher: did you attend BOT meetings?

Interviewee: I’ve been to some BOT meetings, but I can’t find a place for myself. Here I have a typical farm, there were also large hotels, for example (hotel name). They speak a language incomprehensible to me, also ... Not that I don’t understand what they meant, but I didn’t see the sense of belonging there. Personally, I didn’t see any benefits for myself. Perhaps I will join the organization of highlanders promoting folklore, it suits me better” [P28].

Research showed, however, that the pursuit of a more optimal level of communication distance was possible through the involvement of a “third party” who interpreted knowledge for all parties and/or presented it in a way accessible to everyone. This is evidenced by the words of a person talking about meetings of potential members of the Beskid Tourist Organization. The organizers of the meeting invited both scientists and the PART (Polish Agency of Tourism Development) representative to provide them with knowledge about the needs and possibilities of cooperation in the field of tourism development in the Beskidy region:

“We had lecturers, also a lady from PART, who knew a lot, was talking in a understandable way, had extensive experience, was accepted by listeners. Good contact was established with the listeners, it was very important, therefore people came willingly to these meetings. The group of scientists, in turn, used a language that is hardly understandable, which was incomprehensible to many. They spoke at a high academic level” [P2].

4.3. Organizational distance

As mentioned earlier, each partner has its own autonomy and level to which he or she accepts interference from other entities. When the level of this interference resulting from the need to coordinate activities was too big, it negatively affected partners’ satisfaction of cooperation. Some members of the Wisła Tourism Organization


wanting to implement their own ideas about the development of the municipality and having experience gained also outside Wisła, were convinced that this development could be done flexibly and efficiently. However, they faced bureaucracy and administrative problems that they did not understand and which ultimately discouraged them to cooperate:

“(...) He (one of the active entrepreneurs in Wisła) said that he would enter [into WOT], if we would implement the program for him, but we told him that this is not the case, because there is a general meeting, there is presented a program of activities for the coming year, members of the organization come, and it must be accepted, it must be voted. It can’t be that we are entering a completely new program in the middle of the year (…). Finally he refused” [P39].

On the other hand, when the level of organizational coordination is too low, it favors uncertainty and opportunist activities. This was visible, interestingly, also in the case of some activities undertaken by the WOT or decisions of this organization about which the members had no knowledge, and learned about from the researcher.

4.4. Functional distance

Research also revealed the existence of functional distance. It was emphasized that to some extent its existence (manifesting in the fact that entities have specialized knowledge in different fields, e.g. various industries), is beneficial for newly established companies which, thanks to the experience of their business partners, can absorb so-called tacit knowledge that they would not otherwise be able to get, in turn it aids innovative ideas. The president of one of the ski lifts said the following:

“The president (name) who called at the moment, they are preparing to launch just on Skrzyczne, the ski lift. And instead of reading folders in which everything is beautiful, perfect and so on, he will come to me to analyze the existing access system, right? At this point, he will form opinions on a subject there. So he knows this system not through the sales person from (system name), but will meet someone who operates the system. If I’m looking for the pros and cons of the new snow groomer introduced by (company name) then I won’t talk to the man who bought this snow groom only with the one who drives it. And if we have interpersonal contacts then such phone calls are possible” [P23].

These words of one of the interlocutors show that different dimensions of distance are mixed together, in this case the functional distance with the social distance discussed below.

4.5. Social distance

Research showed that it was important for cooperation that the partners know each other, liked and respected each other. Often, informal, personal relationships, leading to trust, facilitated contact and cooperation, and even stimulated the emergence of new solutions or ideas:


“I will tell you that all such more or less successful initiatives in Wisła, whether cooperation with agritourism organization or with the city in general, with the Wisła Tourist Organization, it doesn’t take place at meetings, board sessions or so ... just with coffee or during social meetings, relationships, the best ideas are born in such [atmosphere], suddenly, suddenly” [P4].

At the same time, however, it was emphasized that when these relations are closer, the partners get to know each other better, and this can lead to conflicts between them and the decision not to cooperate:

“I got to know (first name of a person) better and that made a reserve (...). And it seems like it has distanced me (to cooperate with him)” [P17].

4.6. Cultural distance

Too much cultural distance and its negative impact on cooperation was visible both in relation to the differences in the organizational culture represented by the partners, especially when private entrepreneurs and representatives of local authorities were involved (private versus public sector), making entrepreneurs claim that they could not establish effective communication with officials and find agreement on many issues:

“Organizational culture means that the entrepreneur doesn’t get along with our mayor – they say and think differently, this is heaven and earth” [P1]. “These are officials, not entrepreneurs, and they don’t use the entrepreneurial language and purely numbers, or profit, and entrepreneurs don’t (cooperate) because of pure love to the place, but with a desire for profit, financial benefits as soon as possible. So there are very conflicting interests here” [P16].

“Every official working in a municipal office should have been an entrepreneur before. Let him run his own business 4 or 5 years earlier. And then he will appreciate. And at the moment when after school he immediately gets behind the desk – there is no chance to find a common language” [P12].

At the same time, a large cultural distance was observed between the native inhabitants of Wisła and external entrepreneurs. Most of the interviewees claimed that this distance was created rather by Wisła inhabitants who had a strongly developed sense of local identity. This in turn hindered the establishment and development of cooperation between them and external entrepreneurs:

Interlocutor: “In my opinion, but this is my opinion, here everyone is judged by where it comes from – whether it’s native Wisła inhabitant or not, also it certainly matters here.”

Researcher: “And if someone is not originally from here it is a little harder?”Interviewee : “Harder? It’s hard to say. It is different. This is one thing. And

secondly, he certainly has a different perspective on what is happening here and his reactions also result from this” [P10].

At the same time, it was emphasized that the too strong relations between Wisła citizens meant that the local community was closed to outsiders and the entrepreneur’s


origin was most important, and not what the entrepreneur had to offer, e.g. in terms of cooperation. It also blocked innovative activities:

“Certainly people who are not from here are more active, these are more open people, who graduated somewhere in other cities. These are people who go somewhere more, travel, see more in life, know more. However, with those who are from here, somehow it is sometimes more difficult to make contact, because they have such slightly narrower horizons (...). However, I can see that what is happening in the city is positive, these new attractions are emerging, these new interesting objects are usually started by people who don’t come from here (...). However, there are also such people not always well perceived here and not always welcome. Certainly, the fact that new facilities are opening is not always ... it’s not building good relations” [P40].

4.7. Geographical distance

Research showed that small geographical distance stimulates social interactions (including their frequencies) and building trust and thus, stimulates cooperation:

Researcher: ”Please tell me, do you cooperate with any entities outside WOT?”Interlocutor: “yes, mostly with all the neighbors – in the neighborhood (...) here

the neighbor has these rooms – (name), then a friend has guest rooms house (name)”Researcher: “That is, by sending guests, for example, when you are overbooked?”Interviewee: “yes, we know who has some free places, no free rooms or

something, but it’s more like a friend .. we just know each other” [P34].On the other hand, if the geographical distance was too large, it hindered

communication between partners and cooperation as well:“In general, however, this place is so far away that I find it difficult to collaborate

with anyone. If the farms (agritourist businesses) are grouped closer, you can recommend something to someone. I live so far that (…) I can’t interact with someone 15 kilometers away. Once someone gets here by car, I have to have everything in place” [P28].

5. Conclusions

The paper presents distance dimensions and their impact on economic cooperation. Based on the research results a few conclusions can be formulated.

First of all, the research allowed to confirm other authors statements [Boschma 2005; Rallet, Torre 2005], that different types of distances are interrelated. For example, a small geographical distance may stimulate social interactions (including their frequencies) and building trust [Boschma 2005] (social proximity). In addition, other forms of proximity may substitute the geographical one. For example, organizational proximity enables long distance coordination [Rallet, Torre 2005].


Secondly, while according to research, all distances’ dimensions are important for business cooperation in the tourism sector, it seems that in relation to processes related to a given territory (e.g. tourism development) some, such as social or geographical distance, play a key role. Geographical distance often leads to other forms of distance, including the social. The potentially greater significance of spatial location (the geographical factor) than of other factors – such as the time of conducting business activity or the origin of the owner/manager of the enterprise (from that municipality or from outside) – for undertaking and intensifying cooperation in tourism was shown by Czernek and Majewska (2019) in their research, however confirming their conclusions requires further in-depth quantitative analyses.

Thirdly, it also seems that the importance of different types of distances may be different regarding the type of cooperation (e.g. depending on the number of partners and the environment they represent, e.g. the public and private sectors with a completely different organizational culture where the organizational or cultural distance will have a significant meaning), and even at a different stage of cooperation, depending on the so-called cooperation life cycle. Certainly one should agree with the authors’ claim that the condition for the efficiency of territorial development needs a search for the optimum in various distance dimensions [Sokołowicz 2013] – see Figure 1.

Fig. 1. Different levels of distance dimensions

Source: own elaboration.

0

2

4

6

8

10cognitive

organizational

functional

communicative

social

geographical

Max.Average - optimal?Min.Optimal (dependent on circumstances)


However, this statement raises further questions: is there an optimal level of distance between partners to achieve the goals of cooperation? How to determine this optimum? Is it the average level of each distance dimension (the red line in Figure 1) or can it be a low level of one dimension of distance and a high level of another (e.g. the scenario highlighted in purple in Figure 1), and what factors it depends on? How this optimal level of distance varies depending on, e.g., the type of cooperation, its purpose, the place (territory) in which it occurs and, the specificity of the place (the local or regional context will certainly be of great importance in this case), and how it changes depending on the life cycle of cooperation or, what is also interesting, on the life cycle of the entire tourist area? This, in turn, raises further dilemmas as to whether this optimal level of distance will be perceived the same by all parties of cooperation, or whether the optimal level is one that is just perceived/designated by representatives of the partnership structure, namely its board.

These are questions that are worth seeking answers to, although this is certainly not easy because many dimensions are complex and often difficult to grasp and difficult to measure (for example social or cultural distance). However, this issue is important and interesting for all authors dealing with issues related to local territory and its importance for the analysis of economic effects generated both by individual entities (e.g. enterprises) and entire areas (including tourist destinations).

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Distance dimensions and their impact on business